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“If Trump is serious and brings about the end of the late and lamentable era of globalization, the economic shockwaves will be considerable, and a great deal of wealth is going to redistribute itself.”

“The wind of change is blowing through this continent. Whether we like it or not, this growth of national consciousness is a political fact.”

British Prime Minister Harold Macmillan

In 1960 the then British Prime Minister, Harold Macmillan, made a famous speech to the South African parliament warning of a wind of change sweeping the African continent as independence movements swept to power from the old colonial empires. It was one of those watershed moments in world history which couldn’t be stopped as the South African apartheid regime eventually realised in the 1980’s.

My view is that we are living through a similar era of massive change, driven in part by the disruptive forces of man-made climate change, worsening resource scarcity and a global debt super-cycle which nearly destroyed the financial system in 2008. The election of President Trump, something I predicted, was a critical moment in accelerating the process of collapse of the liberal international order.

This post will be a review of where we are on Brexit, the Trump presidency and global situation and where I see things going over the rest of this decade.

The Brexit vote was the first major tremor against the established political and economic status quo which so benefited the privileged classes of the developed world. Whilst the lower socio-economic classes experienced stagnating wages, driven in part by mass migration from within and outside the European Union (EU) the privileged classes benefited from higher housing prices, cheaper imported labour including nannies, plumbers and so on as a huge influx of hard working migrants drove down the costs of goods and services. The Leave vote was the moment a majority of the British population decided enough was enough.

One of the reasons the British have never had a violent revolution for the past few centuries is that it’s ruling elite have had the common sense to adapt rather than resist pressure from below. The decision by both the main parties, Labour and Conservative, to campaign to leave the single market underscores this shared recognition that being able to control immigration flows from the EU was a pressing concern for many British voters.

The Corbyn electoral surge in the May general election last year was also a rebellion against the establishment and the current way our economy is organised. For significant parts of the electorate, Jeremy Corbyn message of economic radicalism offered hope that some of the wealth accrued by the big corporations and the wealthy would be redistributed to the bottom 80% of the population. For those Brits who reside in the grim world of zero-hour contracts, Orwellian warehouses and high personal debt, capitalism holds no benefits to them. For those readers who think I am exaggerating I recommend that they read this review in the conservative Spectator magazine on how the other half live in modern Britain.

My central massage is that the Brexit and Corbyn political breakthroughs are two sides of the same coin, that is, the overwhelming desire for change in the current political and economic structure from the majority of the population. And this is happening across the developed world.

The recent elections in Italy have seen a massive surge in support for the populist parties of the Five Star Movement and the Lega gaining over half the vote. We will see if my prediction, at the beginning of the year, that the centre-right parties will be able to form a coalition government comes to pass but the scale of the anti-establishment vote shook the Italian and European political classes.

The rebellion in Italy, the rise of the nationalist AfD within Germany (which I explored last year) and the slow death of President Macron’s ambitious eurozone reform agenda all point to a softer Brexit outcome by March 2019. It is overwhelmingly in the economic self-interest of the major EU powers for an amicable divorce settlement with Great Britain. I concur with the forecast by the German investment bank Berenberg, who have predicted a “semi-soft Brexit” outcome.

The British political class will be engrossed in the Brexit negotiations going into the end of this decade and much could happen, including a fall of the May government or early elections that could upend the current status quo. It is for this reason alone that it is too early to make a definite forecast on the likely outcome of the next general election, due by 2022.

However, assuming that an eventual semi-soft Brexit outcome is finalised by December 2020 (the end of the transition period) under the current government, it is likely that Prime Minister Theresa May will stand down shortly afterwards, to pave the way for a new leader to make their mark before returning to the country. The only Conservative politician who could transform the Tory party’s prospects is the Scottish leader Ruth Davidson who seems most in touch with the “struggling middle” who will be key to the general election. If she becomes the next female and first lesbian prime minister in a post-Brexit Britain, the Tories have a fighting chance to remain in power for a third term in office. If not, it looks more likely then not that Jeremy Corbyn’s Labour party will win the election.

I predicted at the beginning of the year that President Trump’s Republican party will remain in control of the House and Senate during the mid-term elections in November 2018. I stand by that prediction.

To put it simply, the majority of Americans support an economically nationalist tariff oriented economic strategy geared to the re-building of America’s manufacturing economy. As Greer notes in the quotation at the top of this post, if Trump goes through with his agenda, it will be the end of globalisation itself.

Whether or not the Orange Caesar carries through with his threat to impose tariffs across a range of industries, including cars, it is already causing tremors within Europe and beyond. An entire generational business model is under threat and already, German car manufacturers are panicking at the prospect of being priced out of their top two markets, the UK and America. My own view is that it is likely that an increasingly confident President Trump will impose his economic and foreign policy vision over the next two years, resulting in a likely re-election of President Trump in November 2020.

The global markets are entering the late cycle of the bull market which historically favours commodity related stocks, including oil and gold. It is for this reason I continue to think that oil will rise to 80 dollars this year which will be one facet within a rising commodity super cycle over the next couple of years.

In regards to the crypto market, it is likely that we will see continued volatility within this market over the two months before a major rise in prices from May onwards as institutional investors start to pour trillions into the new market. By the end of the year, investors will likely be kicking themselves that they didn’t take advantage of the depressed prices within the crypto sector during the early months of 2018. The emergence of the crypto-currencies and the underlying blockchain technology is a reminder of how technology is disrupting traditional industries.

I intend to carry on writing my series on technology and how it will impact the world in the coming decades and this will be the subject of my next post on FI.

I encourage all those readers who have questions to post on the comment box below or, if you have not already, subscribe to the blog.

REUTERS

“We will get power, and then we will implement what is necessary…. Then we will give the directive that the three big M’s – Mohammed, Muezzin and Minaret – end at the Bosporus.”

Bjorn Hocke of Alternative fur Deutschland

“I expect mass migrations on the very large scale once climate change goes beyond certain levels, as warm periods in the past have caused extreme droughts in what’s now the Muslim Middle East. If people have a choice between migration and death, they’ll migrate — and so we’re talking about entire national populations on the move, more likely than not armed with everything the armies of their former nations had to hand.

Europe is utterly unprepared to deal with such a thing — due to many decades of blind trust in the United States for their defense, most European countries have feeble, poorly trained, poorly equipped militaries that have no experience in actual combat conditions. I see phenomena such as Daesh and Boko Haram as the first stirrings of the tsunami to come.

Will there be fighting? You bet, just as there was fighting when Islam first expanded across the Middle East, but by the time the fighting ends, I expect the borders of the EU to change in roughly the same way that the borders of the Byzantine Empire changed in the wake of the great Muslim invasions — and as usual in such situations, woe to the vanquished…”

And again, so that the full impact of his forecast is absorbed… especially for my European readership.

The spectre of mass migration during a period of changing climate change, droughts and a worsening scarcity in water, food and energy is not a far-fetched geopolitical fantasy but the most likely scenario facing Europe in the coming decades.

During my recent review of Nafeez Ahmed book which covers the inter-connected crises threatening the global economy, e.g. climate change, resource scarcity and global debt, I referenced the potential time-frames when worsening climate change will trigger a mass flight from the Middle East and North Africa (MENA) region. This vast tropical area will become uninhabitable by 2030-2040, due to prolonged heat waves and dust storms leading to mega-migrations into the cooler European landmass.

John Greer’s grim prediction at the beginning of this year strikes me as terrifyingly plausible given what is already been discussed at the highest levels within the chancelleries of Europe. What I intend to do next is to give a potential scenario of what is likely to happen over the course of the next two decades with a focus on Europe for this particular post.

The 2015-2016 refugee crisis, which has abated somewhat last year (although reduced numbers of refugees and economic migrants have continued to flow across the Mediterranean) shows how hundreds of thousands of civilians can cross vast borders within a matter of months. It was a sneak preview into a dark future.

Imagine we are now in the year 2032. Climate change has got far worse since the dawn of the century and years of heat waves and droughts across the tropics has led to a spiraling economic crisis, low-level famine and civil unrest on a bigger scale then the so-called Arab Spring in the early 2010’s. Arab and African governments, watching growing numbers of their citizens desperately attempt to get to Europe, arrange a secret conference where they discuss the crisis. The consensus, from the leading policymakers and guided by climate scientists, is that the region is doomed due to climate change and the only option is to leave for better climates.

A secret multi-national operation is hatched, led by the Arab League, to prepare for the invasion of the one continent that can act as a future homeland for the desperate Muslim masses of the MENA region, Europe. Over the next 18 months, governments arrange for the remaining physical capital and wealth to be shifted into relative safe havens in the Americas and East Asia, the funds of the states invested into the remaining national armies and the civilian population prepared for war. Clerics and the mosques play a key role in preparing the male youth on the coming war against the European infidels, a worthy jihad and a fight to the death in the name of the Prophet Mohammed and Allah.

Irregular Islamist pirates in the Mediterranean prepare the way, harassing the weak navies of the European Union (EU) and disrupting trade whilst the nations of Algeria, Tunisia, Egypt, Morocco, Turkey and Libya build a vast fleet of small ships ready to cross the seas. As the seas warm in the spring of 2034, the calls for jihad arise across the minarets of the Muslim world.

Whilst the civilian population are mobilised, taking their essentials, including guns, machetes, water, gold and anything else of portable value for the epic migration, the coastal towns and cities are rammed with small boats ready to cross the waters to southern Spain, Italy and Greece. The special forces and armed solders of Operation Saladin are ready to act as the advance guard of a massive population movement into the heart of Europe.

By the 2030’s, the Muslim population of Europe will be bigger then currently estimated, and will be concentrated in the major cities of western Europe. Whilst the majority of Muslim European citizens are loyal, polls suggest that a significant minority have ambivalent or negative loyalties to their host country.

It is likely, in the build-up of the armed invasion of southern Europe, that those jihadi cells will be activated to cause mass mayhem to distract European governments and their security services from the impending threat. Whether or not the jihadi terrorist plots are stopped or not, the attention of the authorities will be inwardly focused on domestic security.

FRONTEX

Physical geography doesn’t change and the routes of an armed mass Muslim migration into Europe will be familiar to those who have followed the refugee crisis over the past few years. The key routes of the Muslim armada will be the following;

Crossing the Straits of Gibraltar into the historically Islamic lands of the fabled Al- Andalus, crushing the Rock of Gibraltar and heading towards the Pyrenees mountains, the natural barrier at the Spanish-French borders. These armies will be following the path of the legendary Abdul Rahman Al Ghafiqi in the 7th century AD.

The second key route will be from the city of Tunis to the horn of Italy, principally Sicily but also potentially the French island of Corsica to land in what will likely be the 2030’s to be the Muslim majority city of Marseille in France. I would imagine that isolated islands like Malta will be starved into surrender by the Muslim navies once they overwhelm the resistance of EU naval forces. Once naval superiority is achieved, a huge naval operation to transport hundreds of thousands of armed Muslim invaders into Italy would commence with the goal of conquering the capital of Rome, the citadel of the global Catholic Church and the ancient capital of the Roman Empire.

The final route will be through Turkey, crossing the Greek islands and heading northwards through the western Balkans into central Europe. The Greek military is a formidable force and would need to be vanquished before the Balkans route opens up for the Muslim invaders.

A likely course of events will be that despite ferocious local resistance, the sheer scale of the invasion will see Muslim armies seize control of the bulk of Spain, the Mediterranean islands and assuming Turkey joins the war, the fall of Greece to the Islamic tsunami.

The Mediterranean will become a warzone, with naval battles and a huge armada of ships transporting initially the troops and later on the armed civilians to the landing grounds of southern Spain, Italy and mainland Greece. I suspect that the French military will be busy battling urban jihadi insurgencies in their big cities including Paris and fending off incursions by Islamic special forces into their southern coast.

Should Greece be militarily overwhelmed, the path will be clear for the millions of armed Muslims to cross through the western Balkans into Vienna. This will likely trigger the entry of the Russian Federation into the bubbling cauldron, in defence of their historic Slavic allies, the Serbs and Bulgarians. Expect to see a huge Russian army cross either by sea or land, into the western and eastern Balkans to battle the Muslim invaders coming northwards. In the process, much of central and south-eastern Europe will remerge as a de facto Russian sphere of influence.

One can therefore imagine a scenario whereby despite huge numbers, the Muslim armies become bogged down, like the Turks centuries ago, within the mountainous Balkans with the locals being financially and militarily supported by the Russian army.

Western Europe is a different matter. Whilst the United Kingdom still has a respected military, it is unlikely to become heavily involved in the fighting and will be busy securing the island defences and combating the internal jihadi threat. The most likely strong military powers in the 2030’s, France and Switzerland, will be key to the future of western Europe. The French have a large standing army, will have a young generation reared in military subscription and a shadow para-army of nationalists ready for war.

It is therefore likely that the French will crush any ethnic uprisings in their cities, with likely mass bloodshed and killings, and prevent the Muslim armies conquering southern France. The Alps will form another key defence, which will become a rallying point across central and northern Europe, with a multi-national European army joining the formidable Swiss military to keep the Muslim invaders out.

On a balance of probabilities, I think the French and Swiss defences will hold, just, with the critical assistance of the viable armies of Poland, Germany and the United Kingdom. However, it could be a close-run thing as the Muslims will literally have nothing to lose. In this climate, expect to see politicians and would-be Charles Martel warlords rise to power across Europe and those which have a long record of warning about the threat posed by Islam will likely be in a strong position to win power (including the AfD in Germany).

Should the natural defences of the Pyrenees and Alpine mountains fall to the Muslim armies, then much of central and western Europe will be exposed to the conquering armies of Islam.

It doesn’t seem that long ago that I started this blog, with predictions that shocked my early readership; of a world shaken by Brexit and the victory of Donald J Trump in the November presidential elections.

Now, that time of the year has arrived when I will be attempting to divine the future, again, using history as a guide. History rhythms and the election of Donald Trump, a populist demagogue, is a clear sign that the foundations of the American superpower is rotting badly.

John Greer, in his review of 2018, notes that the accelerating decline of American global power will lead to further instability as our liberal international order continues to disintegrate. This could lead to flash points in troubled parts of the world, including North Korea, the Middle East and North Africa, where radical and extremist groups or governments sense opportunities as an over-extended America cuts back financial and military aid to traditional allies.

So, it is within these broader parameters that I will proceed, as in previous years, to outline a number of probabilistic forecasts for the year ahead.

A major volcanic eruption will happen (50% probabilistic chance)

Volcanic researchers and scientists have been noting an increase in seismic activity from known volcanoes around the world in recent years. My wild card prediction is that at some point this year a major volcanic eruption will lead to significant economic and societal disruption, including cancellation of flights, the enforced moving of populations and damage to homes and businesses.

Whilst I am not a climate scientist, I do wonder if the changing climate is contributing to the increased instability, particularly within the “Ring of Fire” in the Pacific, and whether Gaia is preparing to strike back against the human species causing so much disruption on Earth.

Italy will elect a centre-right coalition government (60% probabilistic chance)

The Italians are returning to the polls in 4 March and whilst the opinion polls currently suggest a hung parliament, the centre-right parties of Berlusconi’s Go Italy, the anti-immigrant Northern League and smaller right-wing Brothers of Italy are rising in the polls.

My forecast is that the centre-right parties will likely reach the 40% mark and be able to for the next government after March 2018 with Berlusconi as the kingmaker. The Italian electorate are increasingly frustrated with the waves of refugees flowing from northern Africa and perceive the current centre-left government as a soft touch on this issue.

Despite a modest economic recovery, youth unemployment is still shockingly high, particularly in the south, and frustration with the euro and the EU is also growing among many ordinary Italians.

Although opinion polls show that a slim majority of Italians wish to keep the euro, the new government will likely be Eurosceptic and hostile to French led efforts to further integrate the eurozone.

Bitcoin will end the year higher then it started – $13.400 (65% probabilistic chance)

The crypto-currency Bitcoin has had a rollercoaster ride, soaring to nearly $20,000 in December 2017 and making early investors fortunes in the process. Bitcoin has serious flaws, including high transaction fees and scalability issues, but it is a first mover and a crypto “gateway drug” to the alt-coins like Ripple, Dash, NEO and the hundreds of other little known cryptos in the sector.

Exchanges, where you can buy and sell cryptos, continue to see hundreds of thousands of new users joining every month. Dedicated crypto-currency hedge funds are raising billions from the superrich keen to get exposure to this volatile and exciting sector. This suggests that we are still in the early to middle stages of this asset boom, despite the speculative froth clearly manifest in parts of the market.

The Republicans will maintain control of the House of Representatives in the November Midterm elections (60% probabilistic chance)

I have been torn on this one for a while now. Until the transformational tax cuts were signed by President Trump I was reasonably convinced that a surge of liberal, anti-Trump voters in the mid-term elections would end the Republican Party’s control over the House of Representatives.

Of course, there is a reasonable chance that a strong surge in turnout from the anti-Trump coalition of the upper-middle classes, the young and minorities will overwhelm Trump’s base and lead to a Democratic victory. My hunch though, is that the old Clintonian dictum, “the economy, stupid” will win out and Trump will trump, again.

The commodity super cycle returns (75% probabilistic chance)

Commodities have enjoyed a roaring trade since December 2017, with copper, oil and other key industrial commodities soaring in global bourses. My thesis is that a the global economy, swimming in trillions of central bank manufactured liquidity, is enjoying a late recovery which is starting to trickle down to the middle to lower stratums of the population.

My specific prediction is that Brent oil will hit $80 this year, on the back of growing global demand, on-going OPEC production cuts and a potential peaking of production by American shale oil producers as noted in this Bloomberg article.

Looking ahead, it is likely that commodities could spike in 2019 in the face of deepening depletion dynamics, leading to a re-run of the nightmarish 2008/09 economic crisis.

Lets not forget that the reason why sub-prime mortgage holders couldn’t afford their home repayments was because a spike in oil prices. This meant that ordinary American workers couldn’t afford their petrol, electricity, food and mortgage repayments and once they stopped paying their mortgages, the consequences led to the implosion of the banking giant Lehman Brothers and the near ending of the global financial system.

Could something similar happen again to the global economy, which is far more indebted, then a decade ago? I wouldn’t bet again it.

The Ethereum crypto will hit $2,000 (70% probabilistic chance)

The crypto Ethereum, also known as Ether, has enjoyed a soaring rise in 2017 and I think it is likely to see a further rise in 2018. Unlike the majority of the cryptos, it is a crypto with real world uses and could have a massive transformational impact in the future.

Ethereum is an indirect way of investing into the underlying blockchain technology and it is for this reason I am confident that the crypto Ethereum, the virtual fuel of the decentralised computing platform, will see a further rise in price in 2018.

I will be continuing my series on the impact of technology, which will include a review of John Michael Greer latest book, The Retro Future: Looking to the Past to Reinvent the Future soon.

Please do not hesitate to add yourself as a subscriber to my blog at the bottom of the page.

So what went wrong? To summarise, I over-estimated the electoral appeal and political calibre of the radical, populist and anti-immigrant/euro politicians on the Continent and failed to anticipate the strong anti-Trump/Brexit backlash from the liberal wing of the electorates. However, in my defence, I do think I captured the broader dynamics going on, even if my specific predictions were a bit off-piste.

Marine Le Pen did succeed in getting into the second round of the French presidential elections, as predicted, and had she faced Francois Fillon (“Fillon”), the conservative arch-Thatcherite candidate, may have had a better chance in the final result. As it happened, when I wrote my forecasting post, Fillon was still ahead in the polls with Emmanuel Macron (“Macron”) only starting to emerge into the limelight.

I would also note in my defence that I twice forecast, once the 1st round was over, that Macron would win the French presidential elections, which you can read here and here. Overall, I consider the French elections, considering the volatility of the race, a reasonable success story for me.

A similar tale emerged during the German federal elections which humbled the German Chancellor Angela Merkel. The Alternative for Germany (“AfD”) party, which had collapsed in the polls earlier in the year, roared back to win 13% of the vote in a result that shook the German political establishment. My post “make Germany great again” explored the rise of the nationalist Right in a country which had been relatively immune to populist politics.

Whilst the AfD failed to hit my ambitious forecast of getting into second place, the strong performance by the nationalists in the federal elections validated my view that populist politics would transform German politics in 2017.

A Bloomberg article noted that contrary to the post-Macron consensus from the Pundocracy the forces of political populism continued to rise throughout 2017. The article notes “A Bloomberg analysis of decades of election results across 22 European countries reveals that support for populist radical-right parties is higher than it’s been at any time over the past 30 years.” So to conclude, whilst my specific forecasts were mainly wrong, I did successfully capture the broader dynamic of a continued wave of populist politics transforming European politics.

The Saudi princes being allegedly tortured in the five star Ritz-Carlton hotel in Riyadh might wish they had removed Crown Prince Mohammed bin Salman (“MBS”) when they had the chance. I did predict, with a 55% probabilistic chance, that MBS would be sidelined or removed but in the end, MBS moved first to seize power in the Kingdom. MBS is certainly a man to watch in the coming years and it is conceivable that the reforms unleashed under his Ceasaresque reign will eventually bring down the House of Saud.

My final forecast was that President Trump would partially or totally remove Russian sanctions. This turned out to be totally wrong, with the alleged collusion before the election between the Trump team and the Russian government, aka “Russiagate”, destroying any changes of an easing of the sanctions regime in 2017. Ironically, the rise of right-wing populist politicians to power across central and Eastern Europe, including the Austrian Freedom Party, increases the chances that this may happen in 2018 when EU sanctions on Russia come up for renewal.

My 2016 forecasts on a narrow victory of the Leave campaign and the rise of Donald Trump to the American presidency were spot on and it was probably unlikely that I could achieve a similar success rate for 2017.

One of the ironies of 2017 is that whilst readers who had placed political bets on a Le Pen victory or an increased Conservative majority would have lost money, if they had brought the crypto Ripple, following my crypto-currency post on 1 December, they would have made over 1,000% return in the weeks that followed. The Ripple price soared from 24 cents to over 3 dollars from the beginning of December to after New Year.

Other cryptos whom I tipped, including Ethereum and Dash have seen big increases in value since the publication of my crypto post on FI, and I remain bullish that 2018 will be a strong year for the crypto-currency space.

I will soon be publishing my forecasts for 2018 and we will see if I have a better success rate this year then 2017.

“… after 2030, both the Euro-Atlantic core, as well as the fast-rising Indo-Chinese periphery, will begin to experience their own symptoms of systematic state-failure”.

Nafeez Mosaddeq Ahmed

This book is a tour de force and a must read for anybody who is interested in the future fate of our industrial civilization.

Stylistically, Nafeez Mosaddeq Ahmed (“Ahmed”) is very different to that other great chronicler of our declining civilization, John Michael Greer (“Greer”), who is an easier read for the layman reader. I have reviewed two books by John Michael Greer, one a near future thriller which posits a rising China defeating America in the 2020’s and a non-fictional book on the impending collapse of the American empire. Both are superb and at times deeply troubling reading experiences.

Ahmed’s book is drier, academic and references a huge array of empirical and scientific studies to back his conclusion that our industrial civilization is heading towards severe trouble within the next 20 years. What it lacks in Greerian narrative and rhetorical flourish is made up by the use of data and scientific research to force the reader to acknowledge that the resource and ecological limits are pressing ever harder on our globalised economic order.

What is striking about Ahmed’s book is that his forecasts for key regions, including Europe, the Middle East, Asia and North America and when their systematic crisis will likely arrive are remarkably close to the 1972 Limits to Growth business as usual modelling shown below.

I have discussed this prescient report before in my post “winter is coming” which you can read here.

So what did Ahmed forecast in his book? Here are the key points;

The world is seeing a “new normal” of extreme weather events, summer heat waves, wildfires, droughts, floods and extreme rainfall which is increasingly common throughout the world. The climate system is being fundamentally transformed, a “climate departure”, which means that within the next decade in the tropics (e.g. encompassing parts of the Middle East, Asia, Central Asia, South Asia and Africa) this will become the new normal, rendering the vast region uninhabitable by 2030-2040, due to prolonged heat waves and dust-storms.

The rapidly changing climate in this vast tropical zone will imperil the lives of up to 500 million people and will lead to mega-migrations into Europe. The political and demographic implications of this enormous wave of humanity attempting to enter Europe I have explored in a post earlier this year which you can read here.

Saudi Arabia, a pivotal global oil supplier, has seen its oil exports decline by 1.4% every year between 2005 and 2015. According to the net export model, Saudi Arabia net oil exports have been forecast to decline to zero by 2030. The Gulf States will face a systematic crisis within the next decade as the money runs out to keep their populace happy.

Total net oil exports to Europe by the former Soviet Union countries including Russia, Azerbaijan and Kazakhstan will decline to virtually zero by 2030 as production declines and China captures a growing share of oil production for its own requirements.

The south-western region of North America is facing severe water scarcity and climatic disruption, which could lead to Lake Mead running out of water by 2021. Lake Mead is the main water supply for the mega-city of Los Angeles and 90% of southern Nevada. The looming crisis is so great that in the medium term it threatens the viability of Californian agriculture and a substantial chunk of the global foodstuff exports which will lead to global food price rises.

American unconventional oil and gas shale’s will likely peak around 2025 which will ensure that the United States is relatively energy self-sufficient compared to Europe in the short-term. After that America will become increasingly dependent on oil imports by 2030 when these supplies will be drying up around the world.

The impending peaks in oil production and net export decline by key producers will lead to another global oil supply shock by 2020, something that I have warned recently in my review of crypto-currencies.

The core regions of our industrial civilization, Europe and North America (“Euro-Atlantic core”), will sustain the neo-liberal status quo by continued debt-money quantitative easing policies. However, after 2030 both the Euro-Atlantic core and the rising giants, India and China, will experience their own symptoms of systematic state failure.

Greer has recently commented on his blog that he expects to see another economic shock at some point in the foreseeable future which China will emerge, after the hit, as the dominant hegemonic power on the world stage at some point next decade, supplanting the United States. This strikes me as eminently plausible given the above trends outlined in Nafeez’s book.

Whilst Nafeez’s forecasts and dates are hypothetical and may be proven wrong, the overwhelming conclusion from reading this book is that readers would be foolish to ignore the rising alert signs emanating from different corners of the world. When visiting Granada last month, the local people mentioned the drought and the extreme heat wave in the summer of 2017, when temperatures hit 47 degrees in the shade! If this “abnormal” climate continues, parts of southern Spain could become uninhabitable within a decade. Indeed, the tour guides mentioned that the locals fled the city during the summer months to escape the extreme heat as it was so intense.

To conclude, if you are interested in learning more about the systematic challenges facing the world in the coming generation, Nafeez’s book is required reading.

In a new series of posts on FI, I will be exploring the potential impact and future of series of new technologies, starting with crypto-currencies. I will be exploring whether technology can mitigate or even resolve the broader challenges of resource scarcity, which I refer to as the Limits to Growth mega-trend.

Readers, can you hear that distant but growing roar across the horizon? That is an army of suited and booted crypto-currency virgins scrambling to purchase their first bitcoin and ether in the coming months… Wall Street is going to be deflowered and fortunes will likely be made in the coming years.

Crypto-currencies have attracted a huge amount of interest in the last year with the most well known crypto, bitcoin, surging to new heights on the global exchanges. For a long time as I was a sceptic, convinced that it was a 21st century version of the tulip craze and not based on any fundamentals. However, in the last few months, I have been engrossed in this exciting new sector and am now cautiously optimistic that it has a promising future.

Coindance

What are crypto-currencies? According to Wikipedia, “…a crypto currency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets”. Different crypto-currencies have different uses and one is not the same as the other. Bitcoin should be considered the reserve currency of the crypto space, to be used as a store of value and as a gateway to buy lesser known cryptos like dash, ethereum classic and ripple. Think of bitcoin as digital gold.

Ethereum, which has a very efficient payment transaction time and is already being used for hundreds of apps, should be considered the Microsoft of the crypto-space. Big banks are already exploring how to integrate ethereum into their banking systems and it is already the favourite within the tech world which are major movers and shakers within the emerging crypto eco-system.

Dash, a little known crypto, is also emerging as a crypto of choice for making payments and has rocketed in value in the last few months as a result. There are hundreds of cryptos out there and the sector is at the same point in the cycle as the tech industry was in the 1990’s when Amazon, Microsoft and other tech companies were just starting to emerge.

Cryptos should be considered digital equities and as the crypto world grows, these blue-chip digital equities will grow in value. The trick is investing in the right digital equities, in other words, the Amazon, Facebook and Microsoft of the next decade.

With cryptos you can transfer them around the world through wallets beyond the control of national governments. This has already proven immensely useful for citizens of Zimbabwe or Venezuela where the economy is collapsing. The developing world has embraced the mobile phone revolution and it is probably only a matter of time before the masses discover the benefits of app based digital currencies held through their smart phones.

The 2008/2009 Great Recession led to a gigantic money printing exercise by the central bankers as a consequence the real value of fiat currencies like the dollar, pound and yen have continued to shrink. Whilst the doomster warnings of hyperinflation has not been realized, the year by year grind of declining living standards for the bottom 80% of the population in the developed world has led to growing populist revolts at the ballot box. Cryptos offer the possibility of escaping this vicious circle into an appreciating world of digital currencies.

Many commentators have compared cryptos to a bubble which is destined to collapse. Whilst these warnings should not be totally dismissed and at times the market has appeared bubbly and overly speculative, I have attempted to show why the crypto space is here to stay and will likely grow in the coming few years. The first wave of adopters were the tech geeks and highly adventurous individual investors and the second wave is about to break soon. These are the institutional, family office and hedge fund “smart money” which are ready to pour billions into this space.

The announcement by the CME Group is a game changing moment and will likely lead to the approval by the American regulator of a bitcoin etf in 2018. Anecdotally I am personally aware that wealthy clients are requesting their relationship managers to purchase hundreds of thousands of bitcoin in family offices and the clamor is growing on a literally daily basis.

It is only a matter of time before an ethereum (also known as ether) future derivative is approved, opening the way for the institutional “wall of money” to invest into the second largest crypto, ethereum. Europe already has tracker funds dedicated to ethereum and bitcoin which provides a safe and regulated way of purchasing the top two crypto currency plays and America will follow within the next 12 to 18 months.

In the context of a likely looming oil supply shock by the end of this decade, it strikes me as unlikely that countries will continue to increase their grid usage to the manufacturing of digital currencies as prices rise, the poor struggle to heat and light their homes and power outages arise. The limits to growth megatrend, which I discussed in my article “winter is coming”, would suggest that the explosive growth in cryptos is unsustainable and will decline next decade as these supply challenges become more apparent to the world.

However, to summarise, with oil prices relatively low and a supply shock at least 18 months away, 2018 and probably 2019 will continue to see explosive returns in the crypto currency space. The medium-longer term prognosis for the crypto sector is a darker picture and it remains to be seen if John Greer’s warning of a speculative implosion of the crypto-currency sector comes true.

I will be completing my 2017 review at the end of this month and will be publishing in the New Year my 2018 forecasting predictions.

I encourage anyone who has read this post to subscribe to my blog if you haven’t already at the bottom of the page.

CDN.history.com

“Thus it’s not too hard to look at the rising spiral of stresses in the European Union just now and foresee the eventual descent of the continent into a mix of domestic insurgency and authoritarian nationalism, with the oncoming tide of mass migration from Africa and the Middle East adding further pressure to an already explosive mix.”

The Austrian elections held on Sunday have seen a surge in support for the anti-immigrant and Eurosceptic forces within the Austrian political establishment. The “centre-right” People’s Party (“OVP”), led by the youthful Sebastian Kurz, won 31% of the national vote, according to the exit polls. Kurz campaigned on a platform of hard-line policies on borders, immigration and regaining sovereignty from the European Union (“EU”) which appealed to the Austrian electorate.

The “far-right” Freedom Party (“FPO”), which has its roots in the post-war National Socialist movement, appears to be in second place, with 26% of the national vote. The FPO is even more hard-line then the OVP on the question of the refugee crisis and has warned of the “Islamification” of Austria.

Before I explore this issue further, I would like to briefly discuss the terminology used by the mainstream media when discussing Continental politics. Whilst the policies of the OVP and the FPO overlap considerably, to the point of convergence, the media refer to the OVP as conservative or “centre-right” whilst the FPO are usually referred to as “far-right”.

Whilst it is true that the OVP roots are in the far right, in terms of policies, it should be classified as a conservative/nationalist party, not as a neo-Nazi/ extremist party. The OVP do not advocate race laws, the imposition of a dictatorship or the destruction of democracy which would be expected of a genuinely neo-Nazi party. For these reason, I will refer to the FPO as a nationalist right or hard-right party and the OVP as centre-right going forward.

The crushing victory of the Right in Austria has ramifications beyond Vienna in a post-Brexit Europe. A Kurz-led Austrian government will likely align itself with the so-called Visegrad countries of central and eastern Europe, who are sceptical of further EU integration, opposed to settling refugees and hostile to the multi-cultural ideology prevalent among the liberal elites of western Europe.

It therefore looks increasingly likely that under the leadership of Austria, a new regional bloc is emerging within the heart of Europe, capable of challenging the dominance of the Franco-German axis. Looking at the modern map, the new bloc looks remarkably similar to the late Austro-Hungarian Empire that spanned Austria, Hungary, the Czech Republic and Poland in the early 20th century.

Beyond the frontiers of the EU, trouble is brewing in the frontier zones of North Africa, the Middle East and the Ukraine. The emerging warlords in the growing arc of failed states, whether they are Libyian militia, jihadi extremists or Ukrainian nationalist gunmen are growing stronger every year.

This growing wave of chaos surrounding a troubled European core is driven by structural factors, including worsening climate change, water, energy and food scarcity and the explosion of population. Should the crisis around the River Nile worsen, to give just one example, a further wave of refugees from predominately Muslim cultures will try and enter Europe. This could trigger unrest, a further surge in support for nationalist politicians and in the worst case scenario a slide into authoritarianism.

On a personal level, when visiting Verona this summer, I saw numerous illegal African immigrants around the train station, a key smuggling hub within Italy. These overwhelmingly young men are physically fit, resourceful and utterly ruthless in their determination to fulfill their dream of prosperity within the crumbling core of our industrial civilization.